TV’s Future is On Demand

My debut post into the world of professional tech blogging was a comparison of IPTV startups Joost, Babelgum, and Zattoo under the headline “Internet Killed the Television Star.” More than a year later, that headline is starting to seem more and more true. The Television Bureau of Advertising expects spot television revenues to fall 2% to 5% in 2009 over this year (in the US). “It’s going to be a miserable year for broadcast TV, which will allow them to redirect resources to the Internet,” said Gordon Borrell, CEO of Borrell Associates, according to eMarketer.

Meanwhile, online video ad spending is expected to quickly ramp up to $5.8 billion in 2013, from just $505 million this year, and approach television ad spending levels. Understandably, WIRED Magazine thus ran a story in this month’s issue proclaiming Hulu, the joint online TV destination from Fox and NBC, as the new way to watch TV.

WIRED’s argument is that Hulu is free, legal, and on-demand, and it is for those reasons that web video is the future of television. That last bit is the most important — on-demand video is clearly a more desirable delivery method from a consumer standpoint, than traditional, scheduled television. You get what you want, when you want it, without having to wait.

There are two main hurdles to overcome in order for the IPTV future to become the dominant reality, though. The first is the relatively minor, but important, issue of availability across devices. According to Robert Bowman, CEO of Major League Baseball Advanced Media, which operates one of the largest live streaming video sites on the web, most viewers will watch video on the biggest screen available to them. That means people would rather watch TV on their television set, and not on their computer. So in order for Hulu, for example, to really be the new way to watch TV, it will have to be easily viewable on television screens.

There are a number of projects underway to make that happen. One is the Open Screen Project from Adobe, which aims to bring Flash video to multiple screens — computer, mobile, television, and other devices. Products such as Microsoft’s Xbox 360 and Apple’s Apple TV will also help to push web-delivered video onto television screens, as well.

The other problem is one of infrastructure. A little over a year ago, I wrote on ReadWriteWeb that the concept of the television channel is dying. In the post, I laid out my vision for a future television utopia, in which all content was delivered on demand (save live content — which would be available on demand after conclusion), and in which air dates would become “release dates” for new content. Programming could be purchased a la carte or entire seasons could be subscribed to.

The major issue with my vision is that the infrastructure doesn’t yet exist to support it. The current broadcast infrastructure in the US could support all 110 million households watching the same show at the same time, but as I understand it, it couldn’t support all 110 million households streaming different content on their own schedules.

The success of sites like Hulu and the growth of online video advertising revenue, coupled with the decline of spot TV revenue will change that, however. As I concluded in my RWW post last year, “the increasing popularity of web video and the ‘on demand’ nature of the Internet will force television networks to begin rethinking their delivery methods and eventually upgrade their networks to be able to handle completely on demand services.”

For that reason, the future of TV might indeed look a lot like Hulu.

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  • automatic_ab

    “the increasing popularity of web video and the ‘on demand’ nature of the Internet will force television networks to begin rethinking their delivery methods and eventually upgrade their networks to be able to handle completely on demand services.”

    Though this may be true, the amount of money that it would take for any of the major networks to put a “dependable”, key word here, infrastructure in place that would support “all 110 million households streaming different content on their own schedules” would be astronomical, I think, to say the least; it would also take a really, really long time to do. I’m sure it will be possible and maybe possible now to put such an infrastructure in place, however, based on my perception on how networks think, at the end of the day, the question will be, “Is it in the best interest of the network to put such an infrastructure in place.” Oh and just for the record, I love HULU. If it is then the future of TV, count me in.

  • Crystal

    I thought the same thing until my ISP started talking about limiting bandwidth. I enjoy downloading content from Unbox to my TIVO and when I found out they were going to limit my downloads, I was disheartened. I looked around for ISP’s doing the same thing and they are out there. Is this the future of video on the Internet?